Gov. Kemp’s Tort Reform Plan Sparks Debate in Georgia

Gov. Kemp’s Tort Reform Plan Sparks Debate in Georgia \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Georgia Gov. Brian Kemp is making tort reform his top priority, arguing that limiting lawsuits will curb rising insurance costs. While business groups support the move, critics question whether it will actually lower premiums for consumers. Some experts say high jury awards are not the primary driver of insurance hikes, pointing instead to inflation, economic cycles, and market conditions.

Gov. Kemp’s Tort Reform Push – Quick Looks

• Kemp argues that limiting lawsuits will curb rising insurance costs, but experts say the impact on premiums is unclear.
• His proposals would reduce business liability, cap medical damages, and restrict how lawyers present damages to juries.
• Opponents argue that insurance companies remain profitable and lack transparency on how they set rates.
• Georgia Insurance Commissioner John King reports rising claims and payouts, but critics say factors like inflation and accident rates are bigger concerns.
• Tort reform effects vary by state, with mixed evidence on whether savings are passed to consumers.
• Georgia Supreme Court has ruled caps on noneconomic damages unconstitutional, limiting Kemp’s reform options.

Deep Look

Georgia Gov. Brian Kemp has made tort reform a top priority for 2024, arguing that limiting lawsuits will halt rising insurance costs for businesses and consumers. While supporters believe these changes will protect businesses from excessive liability and lower premiums, opponents—including trial lawyers and consumer advocates—say the real impact on insurance rates is questionable.

As lawmakers debate the reforms, the issue has reignited broader questions about how lawsuits, economic trends, and insurance company practices influence costs for businesses and consumers.

What Kemp’s Tort Reform Proposes

At a news conference Thursday, Kemp defended his tort reform push, citing rising insurance rates that he attributes to frivolous lawsuits and excessive jury awards. His plan includes:

• Reevaluating liability laws to make it harder to sue businesses for injuries occurring on their property.
• Limiting compensation for unpaid medical expenses to prevent inflated claims.
• Barring lawyers from using misleading or irrelevant figures to sway juries into awarding excessive damages.
• Allowing juries to consider whether a car accident victim wore a seatbelt and whether lawsuit financing groups were involved.

Kemp argues that industries across Georgia—including grocery stores, hospitals, trucking companies, restaurants, and small businesses—are struggling with rising liability costs and need relief.

“Georgia needs tort reform, and we need it now,” Kemp declared.

His plan is backed by business groups and insurers, who say high jury verdicts make liability insurance unpredictable, leading some providers to exit the market or raise rates.

Is There a Litigation Crisis in Georgia?

Despite Kemp’s claims, the extent of a lawsuit-driven insurance crisis is unclear.

“I went in search of the data, and I have not found it,” said Kenneth Klein, a law professor at California Western School of Law.

While insurers blame high jury awards, consumer advocates argue other economic factors play a larger role.

• In 2022, insurers in Georgia were less profitable than in other states, according to the National Association of Insurance Commissioners—but only in certain lines of coverage.
• Over time, Georgia’s insurance market has followed normal economic cycles, with periodic rate hikes and reductions.
• Inflation, labor costs, and extreme weather events have also contributed to rising premiums.

Big Jury Verdicts: Problem or Excuse?

Kemp points to multi-million-dollar lawsuits as driving higher insurance rates, citing cases like:

• $43 million award to a man shot in a CVS parking lot in Atlanta after a jury found the company should have improved security.
• $31 million verdict against a mobile home park in Jonesboro for failing to prevent a tenant’s murder.

Georgia Insurance Commissioner John King says such cases have made insurance unaffordable for businesses in high-crime areas, with apartment owners and trucking companies hit hardest.

However, opponents argue that large verdicts are rare, and insurers remain profitable despite these claims.

“Whenever they want an excuse to raise rates, they’ll point to a big verdict,” said Joanne Doroshow of the Center for Justice & Democracy.

She argues that lawmakers should focus on requiring insurers to disclose how they calculate rates before limiting consumer rights to sue.

How Does Tort Reform Impact Insurance Rates?

One challenge in evaluating tort reform is that state reforms vary widely.

• Some states saw lower liability insurance costs after limiting lawsuits, but results have been inconsistent.
• Car insurance premiums—a major concern for Georgia residents—may not see significant reductions, as jury awards are only one factor among many.
• Noneconomic damage caps, a common reform, are not an option in Georgia after the state’s Supreme Court ruled them unconstitutional in 2010.

What’s Driving Insurance Costs?

Insurance rates are influenced by more than just lawsuits. Other key factors include:

• Inflation: Higher labor and material costs increase claim payouts.
• Extreme Weather: More hurricanes, tornadoes, and flooding lead to higher home and commercial property insurance claims.
• Market Cycles: Insurance companies sometimes restrict coverage and raise rates to recover from past losses.

Georgia’s high auto accident rate is another major factor. Data shows:

• Georgia drivers pay 11% to 68% more for car insurance than residents in other states.
• However, Georgia drivers are more than 200% more likely to be in an accident.

“Auto claims and payouts have been stable when adjusted for inflation,” said risk consultant David Stegall. “The increase in costs is driven by Georgia’s high accident rate, not an explosion in lawsuits.”

Kemp’s Plan Faces Opposition in Legislature

While Kemp insists his reforms will still allow Georgians to hold businesses and doctors accountable, critics argue they tilt the system in favor of insurance companies.

“Limiting your right as a consumer won’t lower insurance costs,” said Democratic Rep. Tanya Miller of Atlanta.

Trial lawyers and consumer advocates are urging lawmakers to focus on insurance industry transparency before limiting legal claims.

What’s Next?

• Kemp will push for swift legislative approval, but opposition from trial lawyers and Democrats could slow progress.
• The Georgia Chamber of Commerce supports the reforms, but insurers may face pressure to prove savings will be passed to consumers.
• King’s 2024 report on insurance claims data will provide further insight into Georgia’s lawsuit trends.
• Other states’ experiences with tort reform will continue to be analyzed to predict the potential impact in Georgia.

As the debate continues, one key question remains: Will Georgia consumers actually see lower insurance costs—or will insurers benefit the most?

More on US News